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Technology Stocks : Applied Materials No-Politics Thread (AMAT)
AMAT 259.21-4.0%Dec 12 9:30 AM EST
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To: Gottfried who wrote (16587)11/17/2005 8:40:49 AM
From: matt dillabough  Read Replies (4) of 25522
 
AMAT Applied Materials: Maintain Buy- A Glass Half Full not Half Empty - Needham (17.77 )

Needham notes although Applied put in a very good quarter and above the firm's and street expectations the order guidance will be seen as lukewarm as street expectations had hiked growth guidance beyond what was reasonably predictable. As such it is likely the stock will trade off as it did in the after market. The firm had predicted that the quarter would be perceived as disappointing especially given that the stock has been warming up recently due to growing expectations. It has long been the firm's view that we would not see a huge uptick from foundries until a bit later, maybe not even until Q1 2006. Given that guidance for the fourth quarter was for orders to be up 5% to 10% and they delivered 15%, the obvious question to ask is "are they sandbagging?" regarding the first quarter. Could be, but the firm notes they are sure a good part of it is just pure conservatism as the industry is hard to predict and relatively lumpy. The company could easily deliver another up 15% order quarter but we would not get above expectations by assuming that. The firm thinks the company is doing the prudent thing by promising low and delivering high (whenever possible). The firm is maintaining its Buy rating
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